<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                  FORM 10-QSB/A


(X)      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 2004

( )      Transition report pursuant of Section 13 or 15(d) of the Securities
         Exchange Act of 1939 for the transition period ____ to______

                        COMMISSION FILE NUMBER 000-32695

                                   AMARU, INC.
             (Exact name of registrant as specified in its charter)

           Nevada                                         88-0490089
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

  112 Middle Road, #08-01 Midland House,  Singapore 188970 (011)(65) 6332 9287
--------------------------------------------------------------------------------
    (Address of Principal Executive Offices, including Registrant's zip code
                              and telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports,), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X]   No [ ]

The number of shares of the registrant's common stock as of May 20, 2004:
20,000,000 shares.

Transitional Small Business Disclosure Format (check one):   Yes [ ]   No [X]

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements                                                F-1

(a)      Balance Sheets                                                      F-2
(b)      Statements of Operations                                            F-3
(c)      Statement of Shareholders' Equity (deficit)                         F-4
(d)      Statements of Cash Flows                                            F-5
(e)      Notes to Financial Statements                                       F-6

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations                     3

Item 3.  Controls and Procedures                                              6

PART II. OTHER INFORMATION                                                    7

Item 1.  Legal Proceedings                                                    7

Item 2.  Changes in Securities and Use of Proceeds                            7

Item 3.  Defaults On Senior Securities                                        7

Item 4.  Submission of Items to a Vote                                        7

Item 5.  Other Information                                                    7

Item 6.                                                                       7

(a) Exhibits (b) Reports on Form 8K

SIGNATURES AND CERTIFICATES                                                   8

                                        2

<PAGE>

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                                TABLE OF CONTENTS

Balance Sheets...............................................................F-2

Statements of Operations.....................................................F-3

Statement of Changes in Stockholders' Equity (Deficit).......................F-4

Statements of Cash Flows.....................................................F-5

Notes to Financial Statements................................................F-6

                                       F-1


<PAGE>
<TABLE>

                            AMARU, INC. & SUBSIDIARY
                                 BALANCE SHEETS
                   AS OF MARCH 31, 2004 AND DECEMBER 31, 2003

                                                           MARCH 31, 2004
                                                           (CONSOLIDATED)    DECEMBER 31,
                                                             (UNAUDITED)        2003
                                                             -----------     -----------
<S>                                                          <C>             <C>
ASSETS
     Current assets
Cash and cash equivalents                                    $   88,159      $   60,307
Accounts receivable                                              12,108          14,097
Other receivable                                                     --          20,554
Prepaid expenses                                                 17,390          33,758
Deposits                                                          1,699              --
                                                             -----------     -----------
     Total current assets                                       119,356         128,716

     Non current assets
Property and equipment                                           16,576          18,866
Product development, net                                        270,485         297,402
Investment at equity                                                 --       1,403,493
License                                                       2,420,227              --
Other                                                             2,708           2,708
                                                             -----------     -----------
     Total non current assets                                 2,709,996       1,722,469
                                                             -----------     -----------

     Total assets                                            $2,829,352      $1,851,185
                                                             ===========     ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities
Accounts payable                                            $    62,623      $   64,738
Accounts payable- related parties                               475,486         423,444
Line of credit                                                    4,891          58,188
Term loan current portion                                            --           5,007
Income tax payable                                              178,914          36,994
Advances from parent                                             58,276          55,518
                                                             -----------     -----------
     Total current liabilities                                  780,190         643,889

     Shareholders' equity
Series A convertible preferred stock (par value $0.001)
  5,000,000 shares authorized: 143,000 and 0 shares
  issued and outstanding at March 31, 2004 and
  December 31, 2003, respectively                                   143              --
Common stock (par value $0.001) 20,000,000 shares
  authorized; 20,000,000 shares issued and outstanding
  at March 31, 2004 and 18,136,364 at December 31, 2003          20,000          18,136
Paid in capital                                               1,254,581         867,292
Subscribed common stock, 0 and 337,513 shares at
  March 31, 2004 and December 31, 2003, respectively.                --         128,255
Retained earnings                                               731,722         160,696
Comprehensive gain on currency translation                       42,716          32,917
                                                             -----------     -----------
     Total shareholders' equity                               2,049,162       1,207,296
                                                             -----------     -----------

     Total liabilities and shareholders' equity              $2,829,352      $1,851,185
                                                             ===========     ===========
</TABLE>

                      The accompanying notes to financial statements
                          are an integral part of this statement

                                           F-2

<PAGE>
<TABLE>

                                 AMARU, INC. & SUBSIDIARY
                                   STATEMENTS OF INCOME
                    FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                        (UNAUDITED)

                                                         FOR THE THREE
                                                          MONTHS ENDED     FOR THE THREE
                                                         MARCH 31, 2004     MONTHS ENDED
                                                         (CONSOLIDATED)    MARCH 31, 2003
                                                          -------------     -------------
<S>                                                       <C>               <C>
Revenue:
  Licensing and advertising                               $  1,005,917      $      1,621
  E-commerce                                                    11,979                --
  Other income                                                  18,625                --
                                                          ------------      ------------
    Total revenue                                            1,036,521             1,621
Cost of services include $68,404 of services
  purchased from related party at March 31, 2004)              116,034             6,797
                                                          -------------     -------------
Gross profit (loss)                                            920,487            (5,176)

Distribution costs                                               8,973             3,255
Administrative expenses                                        180,862            51,663
                                                          -------------     -------------
 Total expenses                                                189,835            54,918

                                                          -------------     -------------
Income (loss) from operations                                  730,652           (60,094)

Finance expenses                                                  (454)             (925)
Income taxes                                                   159,172                --
                                                          -------------     -------------
Net income (loss)                                         $    571,026      $    (61,019)
                                                          =============     =============

Earnings (loss) per share - basic and diluted             $       0.03      $      (0.00)
                                                          =============     =============
Weighted average number of common shares
  outstanding - basic and diluted                           19,088,384        17,727,273
                                                          =============     =============
</TABLE>

                      The accompanying notes to financial statements
                          are an integral part of this statement

                                            F-3

<PAGE>
<TABLE>

                                                AMARU, INC. & SUBSIDIARY
                                            STATEMENT OF STOCKHOLDERS' EQUITY

                              Series A Convertible
                                 Preferred Stock            Common Stock
                             ----------------------- ------------------------------
                                                                                                                           Total
                                                                         Additional                                        stock-
                                Number   Par Value   Number of  Par value  Paid-in     Subscribed   Retained  Translation  holders'
                              of Shares  ($0.001)      shares   ($0.001)   capital       stock      Earnings     gain      equity
                             -------------------------------------------------------------------------------------------------------
<S>                            <C>      <C>          <C>          <C>        <C>           <C>       <C>       <C>       <C>
Balance December 31, 2002          --   $     --     17,727,273   $17,727    $753,701      $82,844   $121,166  $ (4,475) $  970,963

Common stock issued for cash       --         --        409,091       409     113,591           --         --        --     114,000

Common stock subscribed at
 various dates                     --         --             --        --          --       45,411         --        --      45,411

Net income                         --         --             --        --          --           --     39,530        --      39,530

Comprehensive gain on
currency translation               --         --             --        --          --           --         --    37,392      37,392
                                                                                                                         -----------
Comprehensive income                                                                                                         76,922
                             -------------------------------------------------------------------------------------------------------

Balance December 31, 2003          --         --     18,136,364    18,136     867,292      128,255    160,696    32,917   1,207,296

Shares issued for cash
Feb. 10, 2004                      --         --      1,363,636     1,364     414,636     (128,255)        --        --     287,745

Reverse acquisition           143,000        143        500,000       500     (27,347)           --        --        --     (26,704)

Net income                         --         --             --        --          --           --    571,026        --     571,026

Comprehensive gain on
currency translation               --         --             --        --          --           --         --     9,799       9,799
                                                                                                                         -----------
Comprehensive income                                                                                                        580,825
                             -------------------------------------------------------------------------------------------------------

Balance March 31, 2004
(consolidated)(Unaudited)     143,000  $     143     20,000,000   $20,000  $1,254,581      $    --   $731,722  $ 42,716  $2,049,162
                             =======================================================================================================

                                     The accompanying notes to financial statements
                                         are an integral part of this statement
</TABLE>

                                                          F-4

<PAGE>
<TABLE>

                            AMARU, INC. & SUBSIDIARY
                             STATEMENTS OF CASH FLOW
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

                                                    FOR THE THREE
                                                     MONTHS ENDED     FOR THE THREE
                                                    MARCH 31, 2004     MONTHS ENDED
                                                    (CONSOLIDATED)    MARCH 31, 2003
                                                     ------------     ------------
<S>                                                <C>                <C>
CASH FLOW FROM OPERATING ACTIVITIES
     Net income (loss)                             $   571,026        $   (61,019)
     Adjustments to reconcile net income (loss)
       to cash (used) or provided by operations
     Amortization                                       29,205             30,643
     Depreciation                                        3,021              8,374
     Acquisition of license in exchange for
     accounts receivable                            (1,016,734)                --

   Changes in operating assets and liabilities
     Accounts receivable                                 1,989              4,549
     Prepaid and other                                  35,223                378
     Accounts payable                                   50,041             (1,107)
     Income tax payable                                141,920               (111)
                                                   ------------       ------------
Net cash used in operating activities                 (184,309)           (18,293)

CASH USED IN INVESTING ACTIVITIES
     Software development cost                          (2,288)                --
     Acquisition of equipment                             (731)                --
                                                   ------------       ------------
Net cash used in investing activities                   (3,019)                --

CASH PROVIDED FROM FINANCING ACTIVITIES
     Payable to related party                            2,644             (2,130)
     Payments on line of credit and loans              (58,304)           (10,373)
     Recapitalization of M2B World Pte. Ltd.           (26,704)                --
     Proceeds from sale of stock                       287,745                 --
     Proceeds from stock subscriptions                      --             38,368
                                                   ------------       ------------
 Net cash provided from financing activities           205,381             25,865

Effect of exchange rate changes on cash                  9,799             (8,443)
                                                   -----------        ------------
Cash flow from all activities                           27,852               (871)

Cash balance at beginning of period                     60,307             57,700
                                                   ------------       ------------

Cash balance at end of year                        $    88,159        $    56,829
                                                   ============       ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the period for:
        Interest                                   $       454        $       925
                                                   ============       ============
        Income taxes                               $    17,535        $        --
                                                   ============       ============
</TABLE>

                 The accompanying notes to financial statements
                     are an integral part of this statement

                                       F-5

<PAGE>

                            AMARU, INC. & SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

1.       BASIS OF PRESENTATION AND REORGANIZATION
         ----------------------------------------

         The financial information included herein is unaudited. However, such
         information reflects all adjustments (consisting solely of normal
         occurring adjustments) which are, in the opinion of management,
         necessary for a fair statement of results for the interim periods. The
         results of operations for the three months ended March 31, 2004, are
         not necessarily indicative of the results to be expected for the full
         year.

         The accompanying financial statements do not include footnotes and
         certain financial presentations normally required under generally
         accepted accounting principles; and, therefore, should be read in
         conjunction with the Company's Annual Report on Form 10-KSB for the
         year ended December 31, 2003, and Form 8Ka, filed on May 24, 2004.

         REORGANIZATION
         --------------

         As of February 25, 2004, the Company made an agreement which provides
         for the reorganization of M2B World Pte. Ltd., a Singapore corporation
         with and into Amaru, Inc. (Amaru), a Nevada corporation, with M2B World
         Pte. Ltd. (M2B), becoming a wholly-owned subsidiary of Amaru. The
         agreement is for the exchange of 100% of the outstanding Common Stock
         of M2B World Pte. Ltd. for 19,500,000 common shares and 143,000 Series
         A convertible preferred shares of Amaru, which are each convertible
         into 38.461538 shares of Amaru common stock.

         The exchange was accounted for as a reverse acquisition. Accordingly,
         for financial statement purposes, M2B World Pte. Ltd. was considered
         the accounting acquiror and the related business combination was
         considered a recapitalization of M2B World Pte. Ltd. rather than an
         acquisition by the Company. The historical financial statements prior
         to the agreement will be those of M2B World Pte. Ltd. and the name of
         the consolidated Company going forward will be Amaru, Inc. and
         Subsidiary.

         On this basis, the historical financial statements prior to February
         28, 2004 have been restated to be those of the accounting acquirer M2B
         World Pte. Ltd. The historical stockholders' equity prior to the
         reverse acquisition has been retroactively restated (a
         recapitalization) for the equivalent number of shares received in the
         acquisition after giving effect to any difference in par value of the
         issuer's and acquirer's stock.

                                      F-6



<PAGE>

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         USE OF ESTIMATES
         ----------------

         The preparation of financial statements in accordance with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities and the
         reported amounts of revenues and expenses during the reporting period.
         Actual results could differ from those estimates.

         Management has not made any subjective or complex judgments the
         application of which would result in any material differences in
         reported results.

         CONCENTRATION OF CREDIT RISK
         ----------------------------

         The credit risk is primarily attributable to the Company's trade
         receivables. The credit risk on liquid funds is limited because the
         counterparties are banks with high credit ratings assigned by
         international credit-rating agencies. Licensing and advertising
         revenues were concentrated with one customer totaling 100% of those
         related revenues for March 31, 2004.

         The Company's operations are conducted over the world wide web and some
         Sales and purchases are made to and from locations outside of
         Singapore. However all transactions are recorded in Singapore

         CASH AND CASH EQUIVALENTS
         -------------------------

         Cash on hand, in banks and short-term deposits are held to maturity and
         are carried at cost.

         Cash and cash equivalents are defined as cash on hand, demand deposits
         and short-term, highly liquid investments readily convertible to cash
         and subject to insignificant risk of changes in value.

         For the purposes of the cash flow statement, cash and cash equivalents
         consist of cash on hand and deposits in banks, net of outstanding bank
         overdrafts.

         REVENUES
         ----------

         Subscription and related services revenues are recognized over the
         period that services are provided. Advertising and sponsorship revenues
         are recognized as the services are performed or when the goods are
         delivered. Content syndication revenue is recognized as the content is
         delivered. E-commerce commissions are recognized as received.
         Broad-band consulting services and on-line turnkey solutions are
         recognized as earned.

         To date the Company has only had revenues from licensing and
         advertising, E-commerce and subscriptions and related services.

                                      F-7

<PAGE>

         COSTS OF SERVICES
         -----------------

         The cost of services pertaining to 1) advertising and sponsorship
         revenue and 2) subscription and related services are cost of bandwidth
         charges, channel design and alteration, copyright licensing, and
         hardware hosting and maintenance costs. The cost of services pertaining
         to E-commerce revenue are channel design and alteration, and hardware
         hosting and maintenance costs. All these costs are accounted for in the
         period incurred.


         LICENSING RIGHTS
         ----------------

         Licensing rights refers to the rights to use the content. These rights
         are purchased for a specific period as determined in the contract. The
         costs of these rights are recognized in the accounts over the life of
         the contract on a straight line basis. These contents are then streamed
         into the broad-band sites and the revenue earned from advertising,
         sponsorship and subscription are then recognized according to our
         policy on revenue.


         TRADE AND OTHER RECEIVABLES
         ---------------------------

         Trade receivables, which generally have 30 to 90 day terms, are
         recognized and carried at the original invoice amount less an allowance
         for any uncollectible amounts (if any). An estimate for doubtful debts
         is made when collection of the full amount is no longer probable. Bad
         debts are written off as incurred.

         The Company has reviewed trade and other receivables and determined
         that no allowance for doubtful accounts is required.

         PROPERTY AND EQUIPMENT
         ----------------------

         Property and equipment is stated at cost. Expenditures for major
         improvements are capitalized, while replacements, maintenance and
         repairs, which do not significantly improve or extend the useful life
         of the asset, are expensed when incurred.

         Depreciation of property and equipment is computed using the
         straight-line method over the estimated useful lives of the assets,
         which is three years.

         PRODUCT DEVELOPMENT
         -------------------

         The Company capitalized the development and building cost related to
         the broad-band sites and infrastructure for the streaming system, most
         of which was developed in 2002. the Company projects that these
         development costs will be useful for up to five years before additional
         significant development needs to be done

         IMPAIRMENT OF LONG-LIVED ASSETS
         -------------------------------

         The Company reviews the carrying values of its long-lived and
         intangible assets for possible impairment whenever events or changes in
         circumstances indicate that the carrying amount of the assets may not
         be recoverable. No impairment losses were recorded in the three months
         ended March 31, 2004 and the year 2003.


                                      F-8

<PAGE>

         INVESTMENTS
         -----------

         Investments in unconsolidated subsidiaries in which the Company has a
         20% to 50% interest or otherwise exercises significant influence are
         carried at cost, adjusted for the Company's proportionate share of
         their undistributed earnings or losses.

         ADVANCES FROM PARENT
         --------------------

         Advances from parent are unsecured, non-interest bearing and carry no
         fixed terms of repayment.

         FOREIGN CURRENCY TRANSLATION
         ----------------------------

         Transactions in foreign currencies are measured and recorded in the
         functional currency Singapore dollars using the exchange rate in effect
         at the date of the transaction. The reporting currency is U.S. dollars.
         At each balance sheet date, recorded monetary balances that are
         denominated in a foreign currency are adjusted to reflect the rate at
         the balance sheet date and the income statement accounts using the
         average exchange rates throughout the period. Translation gains and
         losses are recorded in stockholders' equity as other comprehensive
         income and realized gains and losses are reflected in operations.

         INCOME TAXES
         ------------

         Deferred income taxes are reported using the liability method. Deferred
         tax assets are recognized for deductible temporary differences and
         deferred tax liabilities are recognized for taxable temporary
         differences. Temporary differences are the differences between the
         reported amounts of assets and liabilities and their tax bases.
         Deferred tax assets are reduced by a valuation allowance when, in the
         opinion of management, it is more likely than not that some portion or
         all of the deferred tax assets will not be realized. Deferred tax
         assets and liabilities are adjusted for the effects of changes in tax
         laws and rates on the date of enactment.

         EARNINGS PER SHARE
         ------------------

         In February 1997, the Financial Accounting Standards Board (FASB)
         issued SFAS No. 128 "Earnings Per Share" which requires the Company to
         present basic and diluted earnings per share, for all periods
         presented. The computation of earnings per common share (basic and
         diluted) is based on the weighted average number of shares actually
         outstanding during the period. The Company has no common stock
         equivalents, which would dilute earnings per share.

         FINANCIAL INSTRUMENTS
         ---------------------

         The carrying amounts for the Company's cash, other current assets,
         accounts payable, accrued expenses, notes payable, and other
         liabilities approximate their fair value.

                                      F-9

<PAGE>

3.       PROPERTY AND EQUIPMENT
         ----------------------

         Property and equipment consist of the following at March 31, 2004 and
         December 31,2003.

                                            December 31,  March 31,
                                               2003          2004
                                            ----------    ----------
         Office equipment                   $  58,857     $  59,422
         Furniture, fixture and fittings          396           562
                                            ----------    ----------

                                               59,253        59,984

         Accumulated depreciation             (40,387)      (43,408)
                                            ----------    ----------

                                            $  18,866     $  16,576
                                            ==========    ==========


         Depreciation expense was $24,689 the year ended December 31, 2003 and
         $3,021 for the three months ended March 31, 2004.

4.       PRODUCT DEVELOPMENT
         -------------------

         Product development consists of the following at December 31, 2003 and
         March 31, 2004:

                                       December 31,    March 31,
                                          2003            2004
                                       ----------      ----------
         Development expenditures      $ 595,413       $ 597,701

         Accumulated amortization       (298,011)       (327,216)
                                       ----------      ----------

                                       $ 297,402       $ 270,485
                                       ==========      ==========

         Amortization expense was $115,914 for the year ended December 31, 2003
         and $29,205 for the three months ended March 31, 2004.

                                      F-10

<PAGE>

5.       INVESTMENT AT EQUITY
         --------------------

         CRE8 IP&P held the license to operate an E-commerce platform in
         Singapore as well as the first right of refusal in certain Asian
         countries. The company had not commenced operations when it was
         acquired by M2B World.

         In December 2003, M2B World acquired 50% of CRE8 IP&P in exchange for
         account receivable from CRE8 IP&P's parent, CRE8 International. Since
         M2B World did not have control over the license for Singapore, it
         recorded the acquisition as an investment at cost at December 31, 2003.

         The company gained control of CRE8 IP&P in January 2004 when they
         acquired the remaining 50% of the company in exchange for account
         receivable from CRE8 IP&P's parent, CRE8 International and obtained
         complete control over the license acquired. The basis of the license
         has been recorded at the Company's acquisition purchase price in
         accordance with the "Push Down" accounting as required by SAB No 54.

         The subsidiary had no activities or operations during the period. (The
         Company plans to start up the subsidiary operation in the fourth
         quarter of 2004 or the first quarter of 2005.)


6.       LINE OF CREDIT
         --------------

         The Company has a $58,188 line of credit, repayable on demand, used to
         fund the Group's short-term working capital requirements. The line of
         credit bears interest at prime lending rate plus 1% per annum (6% at
         December 31, 2003). This loan is secured by a certificate of deposit of
         $58,188 and a personal guarantee of a director. Interest is payable
         monthly. The outstanding balance was $58,188 at December 31, 2003 and
         $4,891 at March 31, 2004.

7.       COMMITMENTS AND CONTINGENCIES
         -----------------------------

         LEASES
         ------

         The Company leases its office space under a one year operating lease
         which expires in February 2005 with a monthly payment of $1,856. Rent
         expense totaled $10,344 for the year ended December 31, 2003 and $1,893
         for the three months ended March 31, 2004

         Future minimum lease payments due are as follows for the years ended
         December 31, 2004 and 2005


                       2004                          $     16,704
                       2005                                 3,712
                                                     ------------

                                                     $     20,416
                                                     ============


                                      F-11

<PAGE>

8.       CAPITAL STOCK
         -------------

         COMMON STOCK
         ------------

         On February 10, 2004 the Company issued 1,363,636 shares of $0.31 par
         value Series D common Stock for a total cash capital contribution of
         $416,000.


9.       INCOME TAXES
         ------------

         The Company files separate tax returns for Singapore and the United
         States of America. Reconciliation of the differences between the
         statutory tax and the effective income tax are as follows

<TABLE>
                                                   MARCH 31, 2003      MARCH 31, 2004
                                                 -----------------    ----------------
<S>                                                      <C>                <C>
         U.S. Federal statutory tax                           -%                 -%
         U.S. State taxes, net of federal tax                 -%                 -%
         Foreign statutory tax rate                        22.0%              22.0%
         Non-deductible items                                 -%             (0.22%)
         Tax exemptions                                       -%                 -%
                                                 -----------------    ----------------
         Valuation allowance                               22.0%                 -%
         Effective income tax rate                            -%              21.78%
                                                 =================    ================
</TABLE>

                                      F-12

<PAGE>


         The components of income tax expense consist of the following for the
         three months ended March 31, 2003 and 2004

                                        March 31, 2003        March 31, 2004
                                        --------------        --------------
         Current:

         Federal                        $          --         $         --
         State                                     --                   --
         Foreign                                   --               159,172
                                        --------------        --------------

                                        $          --         $     159,172
                                        ==============        ==============

         The Company operated primarily in Singapore and incurred no United
         States federal or state income taxes as of March 31, 2003 and 2004. The
         Company had no significant deferred tax assets or liabilities as of
         March 31, 2004 and 2003.

10.      RELATED PARTY TRANSACTIONS
         --------------------------

         During the three months ended March 31, 2004 the Company purchased
         services from a related party in the amount of $68,404.

                                      F-13

<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE
COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. PROSPECTIVE SHAREHOLDERS SHOULD
UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD - LOOKING STATEMENT
CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE
FORWARD - LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR
FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND
THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE
FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE
ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE
TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF
WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE
BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE
ASSUMPTIONS UNDERLYING THE FORWARD - LOOKING STATEMENTS CONTAINED HEREIN ARE
REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,
THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD -
LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE
AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL
EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S
RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE
FORWARD - LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH
STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER
PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

General

As of February 25, 2004 (the "Closing Date"), Amaru, Inc. (the "Company")
acquired M2B World Pte Ltd., a Singapore corporation ("M2B World") in exchange
for 19,500,000 newly issued "restricted" shares of common voting stock of the
Company and 143,000 "restricted" Series A Convertible Preferred Stock shares to
the M2B World shareholders on a pro rata basis for the purpose of effecting a
tax-free reorganization pursuant to sections 351, 354 and 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended ("IRC") pursuant to the Agreement and
Plan of Reorganization (the "Reorganization Agreement") by and between the
Company, M2B World and M2B World shareholders. As a condition of the closing of
the share exchange transaction, certain shareholders of the Company cancelled a
total of 1,457,500 shares of common stock. Each one (1) ordinary share of M2B
World has been exchanged for 1.3636363 shares of the Company's Common Stock and
100 shares of the Company's Series A Convertible Preferred Stock. Each share of
newly issued Company's Series A Convertible Preferred Stock can be converted to
38.461538 shares of the Company's common stock. Following the Closing Date,
there were 20,000,000 shares of the Company's Common Stock outstanding and
143,000 shares of the Company's Series A Convertible Preferred Stock
outstanding. Immediately prior to the Closing , there were 500,000 shares issued
and outstanding.

M2B World is in the business of broadband entertainment and education-on-demand,
streaming via computers, television sets, PDAs (Personal Digital Assistant) and
in the near future through third generation devices; and the provision of
broadband services. Its business includes channel and program sponsorship
(advertising and branding); online subscriptions, channel/portal development
(digital programming services); content aggregation and syndication; broadband
consulting services and E-commerce.

The restructuring and re-capitalization has been treated as a reverse
acquisition with M2B World becoming the accounting acquirer. The historical
financial statements prior to the closing of the transaction are those of M2B
World.

The following discussion should be read in conjunction with selected financial
data and the financial statements and notes to financial statements.

                                        3

<PAGE>

RESULTS OF OPERATIONS
-----------------------

Three months ended March 31, 2004 compared with three months ended March 31 2003

OVERVIEW

The key business focus of M2B will be to establish itself as the leading
provider and creator of a new generation of Entertainment-on-Demand,
Education-on-Demand and E-Commerce Channels on Broadband, and 3G (Third
Generation) devices.

M2B owns exclusive rights in the broadband media for various contents. M2B will
apply broadband technologies to facilitate its growth in the broadband and
internet sector.


Broadband technology is high speed, high-bandwidth two-way data, voice and video
communications, delivered at high transmission rates up to 12 Mbps. This will
encompass:

o        Digital Subscriber Line (DSL) technology for delivery into computers o
         Set-top box technology for delivery into TV screens
o        Wireless technology for delivery into PDAs and 3G handphones


The immediate plan of M2B in the next three years is to launch high impact, rich
media, entertainment and education content channels globally over the broadband
and 3G, comprising:


o        On-line "Television" on subscription basis - Broadband access premium
         sites
o        Advertising and Sponsorship - supporting the online broadband
         subscription sites
o        On-line shopping malls - E-commerce platforms, and alongside the
         broadband sites, on an interactive basis.

M2B's broadband sites will consist of :

o        ENTERTAINMENT SITES (CURRENT)

         Music, movies, glamour and fashion, lifestyle (hobbies, cooking,
         personalities), documentaries, sports, health and fitness, and others.

o        EDUCATION SITES

         BUSINESS AND CORPORATE TRAINING (CURRENT)

         Management skills, communication skills, decision making, customer
         services and sales, motivation, presentation and writing skills,
         counseling and others.

         SCHOOL LEARNING CURRICULUMS (FUTURE)
         HEALTH AND WELLNESS (FUTURE)

For the broadband, M2B will deliver both wire and wireless solutions, streaming
via computers, TV sets, PDAs and 3G handphones.

At the same time M2B will launch e-commerce channels (portals) that provide
on-line shopping but with a difference, merging two leisure activities of
shopping and entertainment, delivering the ultimate on-line experience. The
entertainment channels will drive and promote the shopping portals, and vice
versa.

M2B World has a wholly owned subsidiary, M2B Commerce Limited, registered in the
British Virgin Islands. M2B World intends to consolidate all its e-commerce
operations and possibly launch new e-bay initiatives under M2B Commerce Limited
towards the last quarter of 2004.

M2B has built and installed its broadband streaming system complete with
firewalls, load balancing, bandwidth and consumer monitoring systems, and video
streaming, video storage and web servers in Singapore.

                                       4

<PAGE>

M2B has a joint venture with FSBM Holdings Berhad (formerly known as Fujitsu
System Business Malaysia Berhad) in Malaysia. The company is registered in
Malaysia as FSBM M2B Sdn Bhd. The joint venture has been given pioneer shares in
Malaysia, and its incentives include an investment tax allowance of up to five
years. The joint venture serves as the production base for M2B, having digital
post-production suites for content production and repurposing. M2B World owns a
9.76% equity stake in FSBM M2B Sdn Bhd.

M2B is currently developing its streaming applications to stream into television
sets, through a copper wire or telephone cable and via a set top box. Testing of
set top boxes was successfully completed in 2003.


By the end of 2003, M2B had developed a capability to stream wireless broadband
and have its own digitized entertainment sites for wireless broadband
applications. In 2004, M2B will be ready to launch its broadband content sites
in the modified form for the 2.75/3G handphones.

BUSINESS MODEL

The business model in the area of broadband entertainment and services is to
provide the company with multiple streams of revenue; from Channel and program
sponsorship (advertising and branding); on-line subscriptions; channel/portal
development (digital programming services); content aggregation and syndication;
broadband consulting services; on-line shopping turnkey solutions; E-commerce
commissions; and on-line dealership.

REVENUE

Revenue for the three months ended March 31, 2004 increased to $1,036,521 from
$1,621 for the three months ended March 31, 2003. The increase of $1,034,900
resulted primarily from advertising and content syndication revenues arising out
of the launch of newly enhanced broadband sites.


Beginning August and September and for the last quarter of 2003, the company
launched new broadband sites in US and Singapore. These sites included Chinese
entertainment sites as well as business and corporate training sites, in the US
and Singapore. One more new movie site was also launched in Singapore.

At the same time in the first three quarters of 2003 the company enhanced its
existing broadband content and e-commerce sites, with better design and content
mix. Hence no or little revenue was earned in the three months ended March 31,
2003.

These enhancements to the existing broadband sites, and the launch of the new
Broadband sites as highlighted above, saw the first reasonably significant
revenues from advertising and content syndication materializing in the last
quarter of 2003.

By March 2004, the company had secured mainly advertising revenues with some
e-commerce and subscription revenues, totaling $1,036,521. The new Chinese
sites, movie sites, business and corporate training sites attracted the bulk of
the advertising revenue due to their content which comprised of television
dramas, movies, documentaries, and corporate training videos.


COST OF SALES

Cost of sales for the three months ended March 31, 2004 increased to $116,034
from $6,797 for the three months ended March 31, 2003. This was attributed
primarily to the acquisition of contents license rights for the broadband sites.
For the three months ended March 31, 2003, no new acquisition of contents was
undertaken, as the broadband sites were still in the process of enhancements.


GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the three months ended March 31 2004
increased to $180,862 from $51,663 for the three months ended March 31 2003. The
increase was due to legal and professional fees incurred in the reverse merger
and reorganization of M2B World and Amaru Inc.

OPERATING INCOME

For the three months ended March 31, 2004, the profit from income was US$730,652
which increased by US$790,746 from a loss of US$60,094 for the three months
ended March 31, 2003. The profit came mainly from the strong revenue growth in
the three months ended March 31, 2004.

                                       5

<PAGE>

LIQUIDITY AND SOURCES OF CAPITAL

The company had cash of $88,159 at March 31, 2004, as compared to cash of
$56,829 at March 31, 2003.

The company believes that cash generated from its operations is able to cover
its daily running cost and overheads.

Cash generated from operations will not be able to cover the company's intended
growth and expansion. The company has plans in 2004 to expand its broadband
coverage by launching new broadband sites in North America and Asia.

In North America, the company intends to launch new entertainment and business
training content sites in 2004. In Asia, the company plans to launch new health
and wellness, and business training content sites in 2004. At least one
broadband entertainment site is also planned for launching streaming content on
a worldwide basis in 2004. In the area of E-commerce, the company plans to
launch one shopping mall for health and wellness products online.

To achieve its plans, the company intends to seek to fund its new growth
activities through equity financing.

In the three months ended March 31, 2004 the M2BWorld Pte, Ltd. raised $416,000
of equity financing to fund its growth activities prior to acquisition of Amaru,
Inc.

ITEM 3. Controls and Procedures

Our President and Treasurer/Chief Financial Officer (the "Certifying Officer")
is responsible for establishing and maintaining disclosure controls and
procedures and internal controls and procedures for financial reporting for the
Company. The Certifying Officer has designed such disclosure controls and
procedures and internal controls and procedures for financial reporting to
ensure that material information is made known to him, particularly during the
period in which this report was prepared. The Certifying Officer has evaluated
the effectiveness of the Company's disclosure controls and procedures and
internal controls and procedures for financial reporting as of March 31, 2004
and believes that the Company's disclosure controls and procedures and internal
controls and procedures for financial reporting are effective based on the
required evaluation. There have been no significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

                                       6

<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal proceedings

No disclosures are required pursuant to Item 103 of Regulation S-B, taking into
account Instruction 1 to that Item.

Item 2. Changes in securities and use of proceeds

During the quarter ended March 31, 2004, the Company issued 19,500,000
"restricted" shares of common voting stock of the Company and 143,000
"restricted" Series A Convertible Preferred Stock to the shareholders of M2B
World pursuant to the Agreement and Plan Reorganization by and between the
Company, M2B World and the shareholders of M2B World. The shares of the
Company's common stock and preferred stock were issued and sold in reliance upon
the exemption provided by Section 4(2) and Section 505 and 506 of Regulation D
of the Securities Act of 1933.

Item 3. Defaults on senior securities                         NONE

Item 4. Submission of items to a vote                         NONE

Item 5. Other information                                     NONE

Item 6.

(a) Exhibits
    --------

    Exhibit No.            Description
    -----------            -----------
    Exhibit 31             CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
                           FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT

    Exhibit 32             CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
                           FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT

b) Reports on 8K during the quarter: Form 8-K (Items 1,2 and 7).

                                       7


<PAGE>

SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   AMARU, INC.
Date: October 19, 2004
                                 By /s/ Colin Binny
                                    --------------------------------------------
                                    President

                                 By /s/ Francis Foong Keong Kwong
                                    --------------------------------------------
                                    Chief Financial Officer



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